Q:  I have a friend who is a Realtor in another state. I am planning to sell my home and am in the market for a local Real Estate agent to help me do this. My out-of-state friend said she could refer an agent to me. She said, after my house sells, she would receive some sort of commission on my home sale because of the referral. Is this true? Is this legal? Will my friend have any involvement in my home sale? If so, what/how? – Melissa

A: Your friend CAN refer an in-state agent to you, and then she can collect a “referral fee” once the house closes – that is legal. Your friend will have no real involvement in your home sale beyond referring you to a local agent. Your local agent will be your primary contact in your home sale, but you can ask your friend for emotional support if you need it.

Leah Hill Pham is a Realtor® with Windermere Wall Street Realty in Seattle, WA.

A: What your friend is suggesting is a very common practice and it’s called a referral fee. Most Realtors welcome a true referral of either buyer or seller clients. I have personally both paid and collected many referral fees.

Does your friend know any of the top listing agents in your area? Or does she have a professional relationship through membership in a organization like the Residential Sales Council of the National Association of Realtors®?

If she has a personal or professional relationship with a Realtor in your area, then she’s probably turning you on to someone that can get the job done. On the other hand if she’s just looking for someone to agree to pay her a cut of their paycheck, you might not end up with the best or brightest.

It’s okay to talk to whoever she refers you to if you want; but for your benefit, I would talk to some other Realtors as well and ask for local recommendations from friends or co-workers that have had a recent, successful transaction with a local Realtor.

Jim Lee is a Realtor with RE/MAX Coast to Coast Properties in Portsmouth, NH. 

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If you’re a seller who is selling a home by short sale and your buyer is an investor, Burlingame, California Realtor® Mary Murphy wants to make sure you know your rights.

“There are special requirements in order to comply with the Home Equity Sales Contracts Act (California Civil Code Sections 1695) but this law applies only if all four of the following conditions have been met:

1) The property is residential one to four units, and

2) The owner currently resides in at least one of those units, and

3) A Notice of Default has been recorded against the property, and

4) The buyer does not intend to live in the property (i.e. the buyer is an investor)

The law requires that a special purchase contract giving the “equity seller” a rescission right and two Notice of Cnacellation forms be used. The agent representing the buyer must complete a statement in writing, under penalty of perjury, that he has a valid current real estate license. Bottom line – make sure you are using an agent who has short sale experiece. A short sale transaction is tricky…”

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Dallas area Realtor® Kevin Rhodes talks about appraisal issues and how they can affect the real estate transaction.

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Charlotte, North Carolina Realtor® Dave diCecco cautions against offering a buyer’s “allowance” in a home listing.

“Too many times I come across listings that have the phrase “seller willing to give X amount in allowance toward (fill in the blank)”. What does that say about your listing?  Are you doing your listing justice by writing that in there?  Is your seller portraying the home in a negative light?

The first thing I think of when I see that is the home needs work. Most times the allowance is designed toward carpet or appliances. However since the seller cannot actually give you money at the closing table, what good does it do to advertise you are willing to give X amount in allowance for floors, paint or appliances?  Why would the seller not just price the home accordingly to the condition of the house and let the buyer decide if the work is worth it or not?

A lot of buyers today are looking for homes that are in move in ready condition. By that, unless the price is below market value they want a home that needs little to no work when they move in. So, the question remains: are you doing your listing justice by writing that in the remarks section? Are buyers automatically bypassing the home?  Most buyers today are asking the seller for concessions on closing costs already; they have saved enough money for the down payment and maybe a little extra for some paint and moving expenses, but do they really have enough money to do the additional updating you are asking for? Probably not.

When you start to write allowance in your remark sections it portrays the home immediately in a negative light.  I talked with a few buyers who looked at homes online with that phrase in it and they said the first thing they thought of was the home was not cared for or was outdated. It could be something simple as not having the time or the money to finish it…yet, it is viewed in a different light among buyers. 

I tend to tell sellers adjust their price according to the condition of the house. Let the buyers make an offer knowing the home needs X amount of updating. What you may think is horrible might be a gem to someone else. You do not know what the buyer’s feelings are going to be when they walk in the house. If it is priced according to the condition and updating inside the house then the house will sell.  Buyers know that  if a home is priced below market value for the neighborhood, there is some work to be done to the house.  But you may never get them in the house to begin with by putting in an allowance for something and keeping your price up to offset the allowance.

Price your home according to the condition of the home and the neighborhood comparables and let the buyer decide if it is something that needs to be done NOW or can wait.

You never know your home may sell sooner than later…”

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Q: If a stove is not attached to the wall or cabinets and can be rolled or pulled out of the cabinetry, is it considered personal property? I know refrigerators are usually personal property. – Roger in Texas

A: In most states, anything that is not nailed down or screwed to a wall is personal property. But to be certain, ask any local Realtor. If the property is listed, the listing may say: “stove does not convey.”

George Szkup is a Realtor®-Broker with Tucson Home Advisor in Tucson, AZ.

A: If a stove is not attached to the floor by a safety bar, then it becomes personal property. You need to check with your local lender to make sure if a stove is required in the appraisal for financing.

Sandy Straley is a Realtor® with Rindlesbach Homes in Salt Lake City, UT.

A: Just like your toaster, blender and a refrigerator that isn’t built-in, a stand-alone stove would be personal property. If you are selling your home, your Realtor should specify in the purchase agreement which items of personal property are included or excluded in the real property sale. This will avoid any misunderstanding when escrow closes and something you thought was included or excluded was not.

Lee Dworshak is a Realtor® with Keller Williams LA Harbor Realty in Rancho Palos Verdes, CA. 

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Q: My husband and I are moving out of state. We have had problems in the past, we have really bad credit. We lost a home about three years ago due to my husband losing his job. We never were late on our payments for five years; then he lost his job and we tried to keep up using all our savings, but with the economy the way it is, we were unable to save it. We haven’t had any recent bad credit since we left Michigan. My husband now has an excellent income and we really want to buy a home. We found a really inexpensive home we like and we are just wondering if it would be even possible to get a loan. We don’t have much money in savings (two kids in college) so are we just dreaming or could we really get a home? Where do we start? – Kim

A: Homeownership is not a just a “dream”, it’s a reality that can be accomplished with proper planning. First, consider applying for a home loan, I recommend you and your husband meet with a reputable and knowledgeable Lender in your area. Because of his steady income there may be some loan options available for you despite the credit scores. Much of it will depend on how much you are bringing in (income wise) vs. debt/expenses. Also, the length of employment is another component. Most lenders want to see at least two years of continous employment. Again, meet with a local lender to see where you stand as a borrower and go from there. If you can’t buy now, you will know how to plan accordingly to become a homeowner again soon.

Maria Jeantet is a Realtor with Coldwell Banker C&C Properties in Redding, CA.

A: The best answer to your question would have to come from a mortgage counselor. Most bank offices, large and small, have mortgage reps on staff, so shop around until you find someone you like who you can tell your story to and see if they can help you. It is harder to get a mortgage now, if you’ve had credit issues in the past, so this might turn out NOT to be the best time to buy, but it doesn’t hurt to talk to someone understanding who can help you improve any credit issues you have so you can plan for the day when you will be able to buy again with confidence.Good luck!

Roberta Baldwin is a Realtor with Keller Williams NJ Metro Group in Montclair, NJ.

A: You need to sit down with a good mortgage lender. Use a reputable one that you can sit down with face to face to discuss your options and what “special” programs might be available in your area that might help you. If you don’t know a good lender, ask a local realtor who has a lot of experience with selling inexpensive homes in the area that you want to buy in, they’ll know which lenders are best for which types of loans.

Dale Weir is a Realtor with Coldwell Banker in St. Louis, MO.

 
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Q: Can you please explain the differences in zoning? Does R-1 Horses allowed mean only horses or can you also have some beef cattle and chickens? – Anonymous

A: While zoning regulations vary from municipality to municipality, unless you have a variance, R-1 Horses Allowed usually means just that. People, horses, dogs, cats (pets) are allowed. Cattle, chickens, pigs, etc are not.

Lee Dworshak is a Realtor with Keller Williams LA Harbor Realty in Rancho Palos Verdes, CA.

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Q: I need to sell my house quickly and would like to get back what I have in it, around $100,000. It’s a 2BR, 1BA older house, 900 Sq Ft, totally renovated and modernized down to the frame in 2007, within easy walking or biking distance from two colleges.

I sent two kids to college over a 10 year period, paying double rent the whole time. Later I learned that many parents buy a house near campus, then when the kids graduate they have an investment to rent or sell. Do you have any idea how to contact parents who might be interested in this kind of opportunity? – Pat in Missouri

A: I’m familiar with the strategy of buying rather than renting and it can work very well in the right market. Having paid rent for one son for four years of college I get it. Thankfully our second son went to college locally and lived at home for the six years it took him to graduate. In all fairness to #2 son, he worked full time as well.

As you’ve discovered, purchasing a home or condo near your child’s college can really make sense especially if you will have two or more children possibly attending the same college. Depending on their ages you could end up saving rent and growing equity for eight to twelve years.

Parents looking to purchase a home or condo to temporarily house their kids in college usually go about the search the same way any house hunter would. Especially if the location they are looking at is out of their area or even out of state. These folks usually employ a Realtor in the area they are interested in. The realtor will have immediate access to all prospective properties listed for sale on their local Multiple Listing Service (MLS).

Keep in mind those Realtors representing buyers usually provide their services for free since the sellers usually pay commission to both the buyers and sellers agents.

Good luck.

Lee Dworshak is a Realtor with Keller Williams LA Harbor Realty in Rancho Palos Verdes, CA.

A: Most Colleges and Universities have “advertising boards” where one can place an ad for anything including houses for sale. Also you could contact a Realtor that sells properties in that area – drive around and look at “for sale” signs. Go to Realtor.com and look at homes for sale in this area then contact agents that are selling them. And remember – the lower the price, (usually) the faster the sale.

George Szkup is a Realtor/Broker with Tucson Home Advisors in Tucson, AZ.

 



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Despite inflation rising around the world, the global economy will continue to recover and growth will continue to expand says Clark, NJ Realtor® Fernando “Freddy” Rivera.

“Today we live in a global economy, an interconnected world where goods and capital move freely at lightning speed across countries. The widely accepted view is that globalization not only benefits all countries across the world but lends itself towards the betterment of the economy as a whole.

As we have seen, globalization can also have a negative impact with a domino effect in times of turmoil and unrest. This impact affects the financial markets both in the U.S. and abroad.

Flight to Safety
When there is political unrest, which was sparked recently in Egypt and has spread like wildfire throughout the Middle East, global investors get nervous. Often they shed their risky assets like stocks and flee to the safe haven of the U.S. dollar and U.S. bond market.

This geopolitical unrest can create a buying binge, which helps bond prices improve. And when bond prices improve, so do home loan rates. However, there are growing concerns that trump the disturbing news coming from the Middle East, which will be the guiding force of home loan rates in the times ahead. What might that be?

Inflation, Inflation, Inflation
Inflation is the arch enemy of bonds and home loan rates, even if inflation is across the pond. The increase in global unrest, not just in Egypt but in other parts of the world as well, is mostly attributed to economic factors – primarily runaway inflation in commodities and food.

The People’s Bank of China has raised interest rates a couple of times, most recently by 0.25% in an effort to head off a continued rise in consumer prices in China. The culprits? Soaring food prices and higher raw material costs lead the pack.

China has also tightened lending standards by requiring banks to raise their capital reserve requirements. In their latest reporting, China’s inflation rose by 4.9% year over year. This was lower than their expectations, however it still marked their highest reading in a couple of years. China may have to tighten their belt some more.

Brazil is appearing on the scene with the hottest rates of inflation in six years. They are attributing this to a rise in food costs and increased bus fares. It is anticipated the Central Bank will raise the benchmark interest rate in March for a second straight time in an effort to contain the spike in inflation.

The British are grappling with inflation as well. Their year over year reading struck a hot 4%, which is twice the rate of the Central Bank’s target. The UK has yet to address this with rate hikes because their economy is in such bad shape that any hike would make matters worse.

Inflation is beginning to become a problem in Europe where it has risen to 2.4%. This is super hot and well above the European Central Bank’s (ECB) comfort zone of beneath 2%.

With an inflation problem in Europe, the ECB will eventually have to raise rates to fight it. When they do, the Euro will strengthen against the dollar, making European bonds relatively more attractive than U.S. bonds. This attraction will likely put a damper on U.S. bond purchases, and could also cause home loan rates to rise.

Many of these countries within Europe have a high number of union workers. They could very well demand pay increases to offset the higher cost of living resulting from inflation. This would exacerbate matters.

As we see signs of inflation around the world, the U.S. isn’t immune. With the second round of Quantitative Easing, known as QE2, the Federal Reserve’s stated goal is to boost Stock prices, create inflation, and lower the unemployment rate. These are all unfriendly to bonds and could also cause home loan rates to move higher. As the old trading saying goes, “Don’t Fight the Fed.” It’s a bit like the Golden Rule, “He with the gold, rules.” If the Fed wants to accomplish these goals at the expense of bonds, they probably will.

Some Good News
Consumer confidence has picked up, hitting the highest level since February 2008. With continued confidence as the economy picks up speed, housing may begin to show signs of improvement as well.

These are very interesting times. Historically speaking, rates are still extremely attractive and remain close to the historic lows…but for how long? Overall, as a percentage of total income, the cost of owning a home is less expensive than it’s been at any time since 1963.

So if you or someone you know has been thinking about purchasing or refinancing a home, now is the time to get started!”



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Las Vegas Realtor® John Brassner recently shared a story of how one person’s misfortune can become another person’s dream come true for a young first time homebuyer.

“My favorite part of selling homes is when you help people achieve their dreams. Back in September I got a call from Kevin Garda. He had just had a bad experience with another real estate agent and a short sale property that he put an offer on. I told him and his girlfriend, Christina, that I would be happy to find him a home and I was thrilled that he already had been approved for an FHA loan. When I met them, I knew they looked young but I didn’t know what age until recently; Kevin is 23 and Christina is 25!

Anyway, within just a few weeks we had an accepted offer on a great single-story previously foreclosed home in the very low $100’s. Kevin is paying less on his mortgage then he was paying rent previously. And the most exciting news: after putting the home in escrow, Kevin put an engagement ring on Christina. The two are planning to get married soon.

This transaction made me reflect about today’s market. Yes, there are a lot of foreclosures and short sales in our market. I should know, I have done plenty of short sales for my clients. But there is also a positive side.

With the median home price in February being $128,000, homes are more affordable than they have been in a long, long time. Kevin and Christina were able to buy their first home in a neighborhood they wanted to live in and pay less than rent. And, I look forward to helping others do the same. That couldn’t have happened in 2005.”

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